METALS-London copper slips for third day as Fed rate hike looms

MANILA, Sept 26 (Reuters) - London copper fell for a third session in a row on Wednesday ahead of a widely expected U.S. interest rate hike and persistent worries over an escalating U.S.-China trade war.

Fed funds rates futures implied traders are fully pricing in a rate hike on Wednesday, with an 85 percent chance the Fed will raise rates again in December. The Federal Reserve has already raised rates twice this year.

Three-month copper on the London Metal Exchange was down 0.4 percent at $6,292 a tonne by 0717 GMT. On the Shanghai Futures Exchange, the most-traded November copper gained 0.7 percent to close at 50,530 yuan ($7,350) a tonne.

With Wednesday's rate hike expected, investor focus will be on the Fed's policy statement and Chairman Jerome Powell's press conference following the meeting.

"The Fed's reaction to trade wars may perversely be to tighten more initially, as the initial impact could be increased price pressures rather than distinct downturn in activity," Mizuho Bank said in a note to clients.

"That said, this is a tail risk, given uncertain impact of pass through."

* FED HIKE: With the Federal Reserve widely expected to raise interest rates on Wednesday, financial markets are focused on whether signs of an acceleration in U.S. economic growth will prompt the central bank to ramp up the pace of monetary policy tightening.

* ASIA GROWTH: Developing Asia could grow more slowly than previously thought next year as the U.S.-China trade war inflicts collateral damage on the region's export-reliant economies, the Asian Development Bank said.

* ALCOA UNION: The union at Alcoa's aluminium operations in the state of Western Australia said it was meeting with the company again on Wednesday to try to resolve a strike that has lasted more than six weeks, after the firm last week revised an earlier offer.

* OTHER METALS: LME aluminium was flat at $2,072 a tonne and nickel rose 0.3 percent to $12,990. In Shanghai, aluminium dropped 0.6 percent to settle at 14,540 yuan a tonne, and lead lost 1.3 percent to 18,015 yuan.